G20 trade and investment ministers' virtual conference  (Photo: qdnd.vn)

G20 trade and investment ministers on Wednesday discussed COVID-19 response at a virtual conference hosted by Saudi Arabia and attended by the 20 member countries along with leaders of major world bodies like the World Bank (WB) and the Organization for Economic Cooperation and Development (OECD).

The conference adopted a 5-point Declaration on shoring up international trade and investment; supporting necessary WTO reforms; the Riyadh Initiative on the Future of the WTO; strengthening the global competitiveness of micro, small, and medium-sized enterprises; and promoting economic diversity.

World economy hit hard by COVID-19

After nearly 9 months of fighting the pandemic, the world economy is facing an imminent risk of recession. Factories have shut down, supply chains have been disrupted, goods sit undelivered, and many businesses have had to close. Millions of workers have lost their jobs. The OECD forecasts that social distancing will plunge the global economy into a 6% decline this year. 

Kristalina Georgieva, Managing Director of the International Monetary Fund, said that as a second wave of COVID-19 emerges, the global economy is encountering prolonged "headwinds", which will potentially increase poverty and inequality. The global GDP will shrink 4.9% this year due to the prolonged lockdown. The G20's GDP fell to its lowest level in more than two decades. According to OECD, the G20's GDP dropped 3.4% in the second quarter of this year, the biggest decline since 1998. Moody's, the credit ratings firm, forecast that the G20 economies may enter a recession this year.

In that context, the G20 trade and investment ministers pledged to mitigate economic and social losses caused by the pandemic, revive growth, increase resilience, and maintain market stability.

Unanimous support for development goals

The G20 Ministers urged countries to end trade restrictions and take the necessary steps to promote trade. They said an open, fair, and rules-based multilateral trading system is particularly important to allow the world economy to recover.

The G20 members and a number of other countries have pledged more than 21 billion USD to support the global health sector. These funds are being channeled to diagnosis, treatment, vaccine development, and other research and development. Prior to the conference, G20 leaders launched a debt deferral initiative for 73 of the world's poorest countries. 41 countries have applied for assistance under this initiative.

The G20 accounts for 85% of the world’s economic output and two thirds of the world's population. It played an important role in mitigating the 2008-2009 financial crisis.